Only issue I have being truthful is, typically an application asks, gross income and then there is source of income.

As far as gross income is concerned, we can put combined income and it would still be truthful. I'm not overstating our income at all. In fact on my spouse's application, I reduce our household income by 20-30K on a 100K house hold income.

The problem may arise when you say you have X gross income and source of income is employment. Does that mean whatever income you stated, it is coming from your employment? in that case it would be untruthful for spouse.